The most commonly availed loan in US is the home loan. They are extended for almost 97% of home value and there are options where in an excess is also sanctioned. The economic recession faced by the world today has this sub prime lending right at its crux. The artificial demand created hiked the prices so much so that fundamentals of actual realty prices were disconnected. The over burdened credit and self destructive mortgages have caused one of the most catastrophic economic depressions of its kind.

The new government has introduced many new policies and mortgage bailouts but the truth still remains that all these financial help would have to be borne by taxpayers irrespective of who or what implemented it. Home prices are on a fall free status in areas like Oregon, New Jersey, California and Madera where most of the homes were over valued. The larger loans taken out by the people here have become liabilities which they are struggling to meet.

In spite of the deterioration and fall in home prices overvaluation continues. Arizona, New Jersey and Atlantic City top the list of areas where home loans have become unaffordable and properties still overvalued. Out of the 330 metros more than 208 were reported to possess over valued properties. Temporary relief in form of Fed rate cuts have come in, easing out the credit freeze but it is just the calm before the storm.

The sale of homes has been directly hit sharing fate with home prices. Both these factors are directly proportional to home loans being taken out in a particular area. An overview estimates a decline of 7% or more in home loans and home sales. The year end would see decline hitting double digits for both home loans and home prices.

Factors such as population density, home prices, historical data and household income helps to determine statistics of home loans availed in a particular area. Areas like Washington DC, Florida, and Pacific Coast where properties were always over valued inspired people to take out big loans with higher monthly payments and higher interest rates. The Midwest has comparatively lucrative home loan deals with Indiana and Ohio being ideal places to buy a home.